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DTN Early Word Livestock Comments 09/15 06:19

15 Sep 2023
DTN Early Word Livestock Comments 09/15 06:19 Packers May Need to Pay More Cattle futures soared to new heights Thursday with very strong gains as traders anticipated higher cash and tighter supplies. Hogs moved in the opposite direction with futures under pressure as cash struggles. Robin Schmahl DTN Contributing Analyst Cattle: Higher Futures: Mixed Live Equiv: $225.74 -$0.66* Hogs: Lower Futures: Higher Lean Equiv: $106.21 +$0.87** *Based on formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. Index has been updated to depict recent changes in live cattle weights and grading percentages.) ** based on formula estimating lean hog equivalent of gross packer revenue. GENERAL COMMENTS: There is nothing slowing cattle down with both live and feeder cattle futures posting strong, triple-digit gains even though cash trade has not fully developed this week. Strong futures Thursday resulted in feedlots repricing their cattle with higher offers. Packers may now need to increase bids to purchase needs for the week. Support did not come from boxed beef, which showed weakness with choice down $1.18 and select down $0.33. Support did not come from weekly export sales, which were a dismal 6,200 mt, down 48% from the previous week. Support came from the reality of tight supply and the idea of continued higher prices. It is amazing that these lofty price levels have not yet had a significant impact on demand. Feeder cattle posted gains of around $4.00 in March and later contracts as buying interest permeated the complex.